The UK Financial Conduct Authority has approved the creation of an asset-backed cryptocurrency ETN market segment by authorized investment exchanges.
The move will allow investment firms and credit institutions to access new investment products, particularly listed bonds tracking #cryptocurrencies .
The London Stock Exchange intends to accept applications for ETNs backed by #bitcoin and ether in the upcoming second quarter.
The UK's Financial Conduct Authority (FCA) announced that it has decided not to prevent recognized investment exchanges (RIEs) from establishing a listing market segment for exchange-traded notes (ETNs) backed by crypto assets. This development, announced in a recent press release, marks a turning point for professional investors looking to expand their presence in the digital asset sector,
UK FCA sets the stage for the emergence of regulated #cryptocurrency ETNs
The FCA's announcement will give investment firms and lenders access to a new class of investment products - ETNs are quoted products typically issued by banks and investment managers that track the performance of an underlying asset or index. The introduction of crypto asset-backed ETNs is expected to provide professional investors with a regulated mechanism to access cryptocurrencies and expand the range of investment strategies available in the market.
The London Stock Exchange has confirmed its intention to accept applications for ETNs backed by bitcoin (BTC) and ether (ETH) from the second quarter of this year. Bitcoin and ether prices have risen sharply, with bitcoin hitting $71,000 and ether hitting $4,000. The UK FCA has ordered exchanges to ensure adequate controls are in place to maintain orderly trading and adequate protection for professional investors.
Regulators' views on retail investor participation
Despite new opportunities for professional investors, the UK FCA remains cautious about retail investors' participation in crypto asset-based ETNs.
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